Valor Credit Union sent letters to members with Prime Rate Certificates informing them that they are no longer accepting add-on deposits into these certificates. This is a hurtful change in terms for members with Prime Rate Certificates. Valor Credit Union attempted a similar change in February when they announced a new 3% processing fee for additional deposits on CDs with terms over 60 months. However, after an uproar from members and this blog, Valor changed its mind and decided not to implement the CD fee. I’m surprised that Valor would try something like this again. I’ve emailed my Valor Credit Union contact requesting that they reconsider this change. Below is a copy of the letter that Valor Credit Union sent to members. It was dated 12/23/15. Readers reported receiving this letter on the 26th.

Dear Member:

Consistent with our reserved right to amend the terms of the Prime Rate Certificate product, we have elected to amend the product to the extent that, until further notice we will no longer accept add-on deposits into the Prime Rate Certificate.

Additionally, we are pleased to announce that until further notice we will waive all penalty fees if you wish to withdraw funds from your existing Prime Rate Certificate. If you wish to withdraw funds, please contact us at 1-844-VALORCU (825-6728) or visit your nearest branch location to speak with a Member Service Representative.

In deciding whether you may want to remove funds from your Prime Rate Certificate, please note that the amount of federal insurance provided by the NCUA for deposits in products offered by federal credit unions is $250,000. Amounts over that are not federally insured.

We appreciate your continued membership.

Regards,
The Team at Valor CU

When a CD (or a certificate as it’s typically called at credit unions) is issued, the customer and the institution agree to certain terms such as the interest rate, maturity and early withdrawal penalties. The general opinion from experts is that the terms of a CD should be maintained until the CD matures.

Valor Credit Union’s Prime Rate Certificate was unique in that it allowed additional deposits. Typically, CDs only allow one deposit when the CD is opened. The add-on deposit feature made the CD attractive and it helped to offset the CD’s downsides like a long 7-year term and a harsh early withdrawal penalty.

Valor Credit Union isn’t the only credit union that has tried to retroactively change the terms of its CDs. Fort Knox Federal Credit Union and CEFCU increased their early withdrawal penalties on existing CDs. Both of these credit unions claimed that their member agreements gave them the right to change the fee schedule at any time. This appears to be similar to the claim Valor is making. However, there is one important difference. Fort Knox FCU was given allowance for the change by the NCUA, but the NCUA did point out that a written change-in-terms notice must be sent at least 30 days before the effective date of the change. In this new Valor Credit Union case, there is no 30-day notice.

When I emailed my Valor Credit Union contact last February, he first explained why the decision was made to implement a fee to discourage add-on deposits:

It allows the Credit Union to control and manage the influx of cash. To date, the Credit Union has attracted over $53,000,000 into the product. Without a mechanism to control this, the Credit Union cannot manage its balance sheet properly.

Soon after that email, he sent a follow-up email announcing that they had changed their mind on the fee. I’m hoping that this will happen again. However, things appear to have become worse for the credit union since February. As DA member Lou described in the forum, Valor’s financial condition has deteriorated. If Valor fails and the NCUA arranges for another credit union to take over, the new credit union is free to lower rates on any of the existing CDs. Thus, it’s in the interest of members to keep Valor financially healthy. However, as DA member Pearlbrown said in the forum, "a financial institution must be prepared to stand by its decisions, just as we are. If terms of contracts can be changed unilaterally, then how can we conduct business with financial institutions or with each other in good faith?"

...or at least miscalculated in expecting interest rates to "normalize" sooner than is happening.

What they should have at least done is cap the allowable investment of any individual member to a preset amount over the term (say $100,000, - as NWFCU did with their recent add-on CD), - which would have mitigated the damage from such a prospective miscalculation.

What they're faced with now (or might have been had they not made the change they did) is that as "years to maturity" lessens and the 3% rate looks more predictably "above market" for the remaining term certificate holders will ramp up their additions and put Valor under even greater pressure.

As for suspending the EWP for those wanting to pull out, - well maybe if they offer a substantial BONUS for such action it's something I might consider, hehe.

Has anyone that didn't hit the NWFCU 100,000 cap try to add funds to their cd. I just tried to transfer a small amount i have in my primary savings and got ta message that i do not have a valid account for transfer.

They were closed for the day so emailed them the message. Hopefully they didnt decide to do the same thing as valor

A few years back I had the experience of opening a CD with a credit union (can't even remember the name now) in either North or South Carolina where I could add on to the CD at what was a good rate at the time. Then a notice came saying they would no longer allow add-ons after a particular date. At that point, I decided that it was not worth relying on taking advantage of some good terms of a CD at a later date if the credit union could not be trusted to keep its word. Therefore, I decided not to take advantage of this particular CD. However, I am very interested in other bloggers' experiences. It gives me knowledge that I would not have had but for Ken's blog. In reading commenter #36 - Lou's comments regarding the overhead and expenses, it strikes me that someone with financial accounting banking experience should take a closer look at their overhead and expenses and definitely bring those items to the attention of the banking authorities and NCUA as well as complaining about the "change of terms" or "bait and switch." One never knows until a financial institution fails or gets taken over (and we still might not be told) if the financial institution is on the "up and up" and conducting business in a nonfraudulent manner or fraudulent manner. It is also possible that the people making the decisiions are just making bad ones. The possibilities are endless. Those in charge may not care if they are benefitting from their current practices but regulatory bodies have an obligation to protect the public interest and need to make sure that the institution is operating properly. I will continue to follow the story of "Valor Credit Union". Whatever happens going forward, following the experiences of those who have invested funds in CDs in this credit union, will add to all of the things we can weigh in the future when an offer almost "too good to be true" comes along.

This is life, unexpected things happen and we have to be adaptive to the changes. To each her/his own. I have only $1K in it so will keep it there. I issued a protest to the both the CU and NCUA. That is that. Life goes on.

Do I change my mind on the said CU? It is not even an issue. It was a business decision on their part after the replacement of their top management. I do not need to form an opinion on them.

I have many RCAs that earn higher than 3%, hope that they will last longer (not counting on it). Again, life is full of surprises. No need to dwell on it. Just move on.

I have a question for those of us who have Prime Rate certificates. This morning I called Valor to change my interest payments from re-invested to pay to my Share account. They told me that I cannot get the interest payments paid out to my Share account and never could. That was not my understanding of the accounts. Is this true?

Going back to that blog, comment #34 seems to be right on and comment #65 may be something that happens in the future:Anonymous | May 30, 2014 | Comment #34Hope everything works well, but have you ever wondered why Toby would stretch out on this when they could get investors just as eager to go for a standard 7 year 3.04% cd without any obligations for the add on feature that would go south on them if interest rates go lower? Also, they pay more if the prime rate goes over 6.29% (However this is not likely to happen in the 7 year term) Something is not adding up on this so that is why I am a little hesitant to jump at it. What is in this deal for Toby? Is there small writing in the disclosure that maybe they can lower the minimum rate later? If what poster no. 9 says is true about the CFO, that would be even more reason to maybe stay away. Anyway, good luck and I hope it works out. It is NCUA insured, so no principal should be lost in the deal. As far as brokerage rate cd's, they come and go. Just investigate the most popular discount brokered CD's and you can get some rate information. There are several options from 7 to 10 years, but they come and go throughout the week. It is best to look at rates at the beginning of the week as this is generally when new issues are posted. Currently, the 10 year actually pays more but the less maturity ones are slightly under 3.04% that Toby pays on the prime certificate.

Anonymous | May 31, 2014 | Comment #65What possibly could be the real difference is if the following scenario happened:

Suppose you paid taxes on 4 years of unpaid earnings and thenToby goes under. NCUA pays your insured principal amount but not the unpaid accrued interest earned that you have paid 4 years of taxes on. I really do not know that this would be the case, but I would have to get some kind of written verification that I would not lose the 4 years of accrued interest that I already paid income taxes on.

Too lazy to check but I'm pretty sure in case of a closure ncua will pay on whatever is in the CD at that time which include dividends already paid..... they won't pay any interest on the cd after the closure so in between closure and however long it takes for ncua to refund your money you would receive nothing...... again I'm not sure so you would have to check for yourself.

Here is a link to the Consumer Financial Protection Bureau to file a complaint concerning a problem with a bank account or service. There was strength in numbers last time, let's see if we can have the same effect again. I intend to file a complaint within the hour. ETA: I have reviewed my files to gather documentation supporting the complaint I will be filing and FWIW have screen prints dating back to early 2012 of pages on their website that state that you can add money to the Prime Rate certificate at any time. I absolutely relied on that statement when opening the accounts.

The first complaint I filed with the Consumer Financial Protection Bureau after Tobyhanna put on a 3% fee for add-on deposits. The complaint was sent back to me and I was told to forward it to the PA Department of Banking - I thought this was wrong because my financial statement from Toby (or valor) said FCU. I asked them to call me - that was ignored, no call. I asked that my complaint and their reply to be forwarded to the Inspector General of the CFPB - no response. I notified the CFPB of all this on my next complaint filed last week. The CFPB has forwarded my second complaint to NCUA and gave no answer to my previous FORWARD TO IG COMPLAINT. Don't put too much confidence into a CFPB complaint, and my prior complaints to NCUA went nowhere.

Valor is in a tight spot. If they provide their members the customary 30 day notice they will be overwhelmed with deposits which will sink the credit union. The alternative, which they have chosen, might save the credit union but places Valor potentates at risk for legal action. Certainly, at this juncture, you know the NCUA is going to become involved.

Valor is pretty clearly a rather messed up institution. To restore order, they need to go back to the old Tobyhanna name as soon as possible.

How about the order in which various contracts are made with credit union? Is the order important? So the first contact made will be the Membership Agreement second will be account agreement third will be the Prime Rate CD agreement. So will the latest "third" agreement superceed the previous two? Perhaps this is the point we can press when file complaint against this Credit Union.

There is an issue which has not been mentioned and which is IMO larger and with broader implications than the current crisis with this credit union.

Allowing Valor to change the terms of the CD instead of honoring them sets a dangerous precedent: "Mulligans" (AKA do-overs) for financial institutions with respect to the products and/or terms of the products they offer.

My complaint with CFPB (filed last week) questionned what the renaming Tobyhanna FCU to Valor cost and what effect the 3% rebate on the Tobyhanna credit card for 4th (Christmas) quarter 2014 (merchants service credit card fee income is probably below 3%) had on profits. Heaven knows what the Valor name is worth now after two attempts to reduce add-on deposits to the Pirme Rate CD and the Kasasa checking account intererst income reduction to 1% from 2.5%?

The penalty to the credit union has to be significant to be a deterrent to other credit unions from trying the same thing. That's why I proposed their penalty be the EWP - what our penalty would be if we wanted out. They chose a 2 year EWP so that's what they should pay if THEY want out. Seems fair. Ken's source said this product took in 54M. If my calcs are right they'd owe a penalty of two years interest or 6% of 54M or about 3M. They move on as do we. I can understand Pearlbrown's stance that they should be held to the original terms. This would be ideal but will it break the credit union? If it does and Valor is taken over our 3% rate is gone. I can see massive rollovers into Prime certificates in the next 6 years. If Valor is in trouble now how can they weather the storm for 6 more years? Francis1

Francis1, I understand your concern. But if the choice is to risk breaking the credit union or set a precedent that institutions can change fundamental qualities of a CD (or any other financial product) unilaterally and with no consequences, I'll take "let's think long term and avoid setting a precedent". To let Valor off the hook is to lose this battle, and lose the war.

Pearlbrown, I do not intend to let Valor off the hook. I filed an online complaint. I emailed them with my views on this. And my first choice is they stand by the original terms. I don't even have all that much in the Prime certificate, about 20K, as I planned to add more over the years. I don't care if Valor fails, they have been horrible to deal with. I'm just presenting a compromise position. Even though there is a lot of support against Valor, what if the ncua sides with them as they did with Ft. Knox? I think the least the ncua will do is require a 30 day notice prior to implementing this change as that is in their regulations. After that anything can happen.

There's a real game-theory/Prisoners' Dilemma type problem here. What Valor did stinks.But if they're forced to honor the original terms -- and as a result, they go under, then anyone who has the 3% CDs will lose that sweet, multi-year deal and be forced to reinvest at a much lower rate elsewhere.

So, paradoxically, a "victory" -- that is, forcing Valor to honor a deal they cannot honor -- could really be shooting ourselves in the foot.

#17, I agree. I think everyone is focusing on the short-term (where else do we get the 3% if they go under), but what about the broader picture: Allowing Valor to change the terms of the CD instead of honoring them sets a dangerous precedent: "Mulligans" (AKA do-overs) for financial institutions with respect to the products and/or terms of the products they offer. A financial institution must be prepared to stand by its decisions, just as we are. If terms of contracts can be changed unilaterally, then how can we conduct business with financial institutions or with each other in good faith?

For those of us who set up a Prime Rate Certificate in April 2012, we have 3.25 years left at Valor. Navy FCU has a 2.5% 30 month CD and this may not be a bad alternative as rising rates by Second Half of 2018 may well be above 3%. I agree with Pearl Brown that this dangerous precedent must be dealt with lest we be inundated in CU/Bank's breaking their CD terms.

Yes, looks like Coward CU has way too much in deposits than what it can handle. Imagine what will happen if PenFed offers 5 year or 4 year promotional 3% rate in Jan 2016? I for one will make full withdrawal from Coward CU. If whole bunch of others do then same then maybe Coward CU will have opposite problem. How to handle the massive withdrawals? :-)

Yes, it was 3%, maybe a scooch more, like 3.04% or whatever. But the certificates basically pay 3%.

An important aspect of this present situation is Valor's unwillingness to promise penalty-free withdrawals out into the future. Thus, should interest rates increase to the point where we can do much better than 3% elsewhere, they reserve the right to discontinue the penalty-free withdrawal currently being offered.

Also, given how they are doing business at this point, it appears most likely any rescission of that offer will come without any notice whatsoever to members.

Valor (so-called) Credit Union: epic fail.

Back when USCU (today merged with another CU, Self-Help) went through this, notice was offered to members before the hammer fell. That was fair. But that is not how Valor does things. They just detonate a nuclear explosion right in our faces . . . and expect us to remain smiling.

If "you" allow that type of language deter you...let me sign you up for some other "deals!" There needs to be consideration for a material change...administrative changes are permissible. And, the APR rate is inaccurate!

I understand your position pearlbrown and some of the other posters, and in many ways I agree with it. However, if one has a fair amount of money invested in the prime rate certificates, it is not possible to totally ignore the financial condition of the credit union since the downside might be losing the 3.04% for the remaining 5 plus years in the CD.

I wonder if the line separating those who have a "**** the torpedoes" approach as opposed to those who are concerned with the viability of their certificates depends on how much money is invested in the certificates. I guess it would be pretty easy to ignore the consequences if you have little or no money already deposited in this credit union.

Anyway, based on my review of their financials, simply discontinuing the add-on feature will not resolve their problems. They must get control of their non-interest expenses or overhead. They have increased by a 1/3 for the first nine months of the year compared to a similar period the preceding year. This means they have to cut staff, maybe close one of their branches and eliminate other administrative expenses. They are running $2 million more in overhead than the prior year. There is no way they can stem the losses until they make these cuts. In fact, they will really need to focus on these efforts before taking the step of discontinuing the add-on deposits, which is actually having far less impact on their losses. A good way to assess the problem of their profligate spending is to compare the growth of their deposits to their overhead for the 12-month period ending Sept 30, 2015. While their deposits increased by a little more than 10%, their overhead grew by more than one third. This isn't sustainable.

I can't - nor wish to - speak for others who support the "they need to honor the contract" position.

I began doing business with the institution well over 3 years ago, and have had plenty of time to add to my accounts there from every maturing CD over that timeframe. The funds on deposit are significant.

However, unlike Lou, I am not advocating a position which will benefit me now in the short term (do whatever is needed so they remain viable and I'll continue to earn 3% on the money) because I choose to take a long-term view. If we don't take a stand now, we'll fight again - and probably worse - later. It may not be from this institution; perhaps from another one who sees an opportunity to take advantage of a precedent set by this credit union being allowed to waive consequences by successfully changing terms unilaterally at their convenience, but it will happen.

So, at least in my case, it is not as Lou rather scornfully suggests an issue of haves vs have nots (or have little or have not as much as others) that drives the "**** the torpedoes" approach, as he so pointedly refers to it. I am willing to take a stand against my own interests, and sacrifice something good in the short-term (3% through the term remaining on the funds on deposit) for the sake of a better future. It's a perspective that has always served me well, so I'll stick with it.

Obviously, if a CU does something like this, we are obligated to use whatever means available to us to protest the wrong. It is not our responsibility to worry about how a possible decision by the NCCUA may impact the viability of Valor, when we consider our rights as consumers. On the other hand, lets be perfectly honest with ourselves here too... we are motivated to do whatever will be in our best interest and will protect our hard earned money, period. Lets just see how this all plays out and then proceed in response to that, rather than worrying about all the possible outcomes.

The 3.5% is not the Prime Rate certificate rate; that is the prime rate. They are not the same thing. If you take the prime rate of 3.5% minus the federal funds rate of 0.50%, you come out with the 3.00% for the prime rate certificate. Confusing, I know.

I think the best thing to do is to protest against this credit union. I think we need as consumers to make an example out of these people and teach them who is boss. When the big banks failed in 08', the scum in Congress decided to bail them out on our dime.

We need a Return of the Jedi moment and defeat the dark side. These people are Indian Givers and they need to learn they are scum!!!!

I have carefully reviewed the responses and I see the virtue of the need to make an example out of this CU's behavior. Further, I understand that some of the anger is connected to the history relating to Ft. Knox CU. HOWEVER, I am also aware of the implications of coming down on a credit union that is perhaps "overextended" with the product strategy in question. BUT, I also would be curious to know how many of the "HAWKS" actually have significant assets in Valor. Are you prepared to deal with the complexities if Valor is taken over by another financial institution that could kill the 3% CD's with a single blow?

If Coward CU goes out of business either because it is taken over, or NCUA steps in and dissolves it, then either options are just fine. I know my CD of 3% will disappear, but that's a small sacrifice than having this damaging precedent hanging over our collecting heads.

(1) Make the credit union start accepting additional deposits, and make the effective date of the deposit retroactive to the date when is stopped accepting

or

(2) Have the credit union give back all the assets (both principal and interest) in the CD and make them pay the additional full amount of the interest that I otherwise would have obtained, had I retained the the CD till maturity.

Your "order of contracts" logic is simply wrong in suggesting that the CD agreement must repeat that previously established right to avoid its negation by omission in the specific terms of the CD. Now perhaps if there were some positive renunciation of the right to amend in the CD contract itself you might have an argument.

Your desired resolutions are no more than an empty fantasy lacking any rationale whatsoever.

Does anyone believe Valor has taken the action it has without legal counsel?

1.) Former CEO recently gets fired with NO explanation of why to the account holders.2.) Valor is allowing any of their prime rate certificate holders to withdraw any amount of money they want without incurring an early withdrawal penalty. 3.) Valor recently sent out a letter that encourages account holders to make sure their account insurance is set up correctly.

Why, why and why? to me, It sure seems like they are wanting to get rid of their higher interest rate depositors in an effort to save the the credit union. I may be wrong, but maybe I'm not.Any suggestions on where to go if Valor gets taken over? It seems Vanguard currently has a brokered cd [10 years] at nearly 3%. It's an option, albeit with a 10 year timetable.

1) He used to respond personally to members late at night. A few viewed this as being responsive, a few viewed this as an opportunity to get rid of "just another customer service rep" who was fetching CEO compensation.

2) Under his unwise management the CU offered the nonsensical "limitless" add-on certificate. Under his unwise management the CU implemented the fees for processing the additional deposits, and under his management in a few days the CU rescinded the fess. Three-strikes-and-he-was-out.

they didnt say check to see if you account insurance is set up correctly. they said the cd is insured only up to 250,000 which is not correct and apparently their motive in putting that in was to instill some fear so people would pull out money and they would have less principal to pay 3 percent on

The ncua ruled for the credit union with a requirement. Ft Knox must notify members of the changes at least 30 days before implementation. Valor gave no such notice. Also, I believe Valor's not allowing further deposit is way more restrictive than Ft Knox wanting to increase EWP's.

Suppose Valor is induced to reverse their add-on prohibition. Would Prime Rate Certificate holders here not be hugely wary about increasing their investment, wondering what might be "coming down" next? I would be, - and in that respect Valor might have nonetheless achieved its underlying objective.

Spot on, Francis1, and quite obvious. I personally have ridden three highly questionable financial institutions "into the ground", which is to say they failed with my dough inside earning a high rate of interest. In each instance I was completely and quickly made whole by either the FDIC or the NCUA.

However, I do agree wholeheartedly with your mention of need to be absolutely certain one is within NCUA insurance guidelines before considering any such course of action. Within those guidelines, though, this is a way to maximize returns with zero risk.

Given all the provisions and from its very inception (as I see it) Valor implicitly said about its Prime Rate Certificate: "IF things work out it will be to our benefit (then laying out the holder benefits in its terms) - but if they don't, well, no one will lose their Investment. Though a few questions and concerns were raised (in previous DA threads) by and large people piled in on it, believing no matter what happened they were guaranteed fulfillment of all the provisions they liked, while ignoring that part of the agreement that might negate them (the part that said that said Valor could amend the terms if things DIDN'T work out).

Things aren't working out, - it happens. But no one wants to face the consequences implied in what they originally agreed to, mild as they honestly are.

Right right ... Turning Pharmaceuticals (ex CEO Martin Shkreli) has a right to raise the price of Daraprim by 5,000 percent overnight ... I guess I am thankful to Coward CU for not implementing monthly service fees on prime rate CD that will equal 100% of the deposit amount, and 100% fees early-withdrawal-penalty. In fact I intend to remain forever grateful to them for not implementing 200% monthly service fees. ... I admit, I've never seen such a CU in my life.

Don't be ridiculous. Valor amended what really amounts to a secondary provision of the CD, - annoying yes, - but most here I would guess who bought into the Prime Rate Certificate would have done so anyway had the add-on allowance not been part of it.

Bought into a seven year CD with draconian provisions regarding interest payout!! You are a self-evident cesspool of conceit. Few if any participants here would have opted for such an offering absent the overwhelmingly attractive add-on feature. This is intuitively obvious, even to a casual observer.

Just don't try that bait and switch with a washing machine. Sell a washer for $500. Just put in the sales contract we could amend the terms any time. Tell customer they owe $2,000. She how that works out.

This is a con that predates the "ponzii", the "Bait and Switch!". They aren't even any good at orchestrating a decent scam much less operating a Credit Union.! They don't deserve to thrive or even exist.

Filing the ncua complaint is a valid route. Another route would be to contact "news outlets" Have their local news outlet do an expose on banks and how they can change terms whenever they want, suich as early withdrawals, and this action and where the consumer is ****ed because the credit union decides to change the rules and the consumer is stuck with whatever they

Im trying to remember. I know that had a minimum rate of 3% and that the last prime rate change didnt make a difference to the current rate. However, if the fed raises the rate again next session won't this cd rate rise.

The NCUA does not want the bank to fail or they may have to cover any losses.. So they will do what is I'm THEIR best interest. Looks like Valor made promises they can't deliver putting the institution at risk. Mutual funds close when they have to much money to invest. If the deposit agreement allows the bank to make changes they can.

But apart from that, Valor's not amending anything in regards to the funds you've already placed with them, - just refusing to accept more. It's annoying, but circumstances changed, and became apparently dire enough they felt they had to. Exploiting that 3% for years to come is a license hard for Certificate holders to bear disappearing, but it was always no more than a pipedream for those of us who saw the "too good to be true" dangers now playing themselves out. The add-on feature was premised on interest rates rising sufficiently quickly that few would indulge it for very long. With that not occurring something had to be done.

# 72, re: "If the deposit agreement allows the bank to make changes they can." I think it’s pretty common now for financial institutions to include such outs in their agreements. Most, though, value their reputation too much to reach for it. Valor management, by their actions, are either too stupid to recognize that, or arrogantly believe their members to be doormats, convenient targets for abuse at first sign of trouble.

Thus, Sylvia, any financial institution can have such outs. Amending the underlying material terms is not contemplated by the parties! For example, the term of the CD could not be changed, a surcharge for the CEO salary could not be added, etc. On and on! Where does it stop with that logic?

# 80, I don’t understand your point. Maybe I need to rephrase mine: Just because an out exists doesn’t mean you get a free pass for using it. Until now, with Valor, I’ve never experienced a financial institution resorting to their stated right to change terms. Unlike manufacturers, the products that financial institutions sell are not tangible widgets. Instead, they’re products based largely on trust, an intangible yet extremely powerful asset. Smart organizations don’t treat that asset lightly. Consumers can keep organizations in line by showing they expect no less.

The Valor Credit Union Board of Directors has two Directors with expiring 2-year terms and two Directors with expiring 3-year terms in 2016:

Andrew Nat (2-year term)

Tony Parise (2-year term)

Kara Badyrka (3-year term)

Tom Casale (3-year term)

An election to fill these open seats will be held in March 2016 and winners will be announced at the 2016 Annual Meeting which will be held: Tuesday, April 26, 2016 Scranton Branch 315 Franklin Avenue Scranton, PA. Nominations for candidates to be placed on the ballot will be accepted by the Nominating Committee from December 1 – 31, 2015. After that time, only nomination by petition will be accepted until January 31, 2016. Qualifications for nomination include:

Must be a member in good standing (not causing a loss to the Credit Union or abuse of Credit Union services)

Must be 18 years of age or older

Must be willing to attend training as necessary and required by the position

Must be able to be bonded through the credit union insurance carrier

Must be able to attend monthly board meetings

Must be active on committees for which he/she volunteers

Interested members, including incumbents should promptly complete a Self-Nomination form, which can be found on this page or in any of our branches, and return to the Nominating committee no later than December 31, 2015. The nominating committee will determine a candidate’s suitability for nomination by reviewing the information submitted on the candidate’s Self-Nomination Form, account history, and possibly by interviewing the candidate. Nominees will be advised in writing whether the Committee will place his/her name before the membership for election.

What if somebody put a 'group-buy' together? If we can all withdraw our money from Valor at one time [without penalty] and then deposit all this money with another institution that puts together a special rate/term for this 'group' of money [potentially many millions], it could be a win-win-win!

.Valor gets off the hook for its high rate..Depositors could possibly get a similar rate and term with a better institution..Some CU could get a huge infusion of cash for being the host bank [assuming they wanted it!]

Just a thought. We used to do this 'group buy' concept to get off road parts for our Jeeps and significantly better deals than available any where else. All we had to do is deal with the company directly and place a large pre-paid order. This way, there was no risk to the company and they received a fairly large order. In return we got a special price. Everybody won. It was a good concept. Maybe it could somehow be applied to the current Valor situation.

I am hoping that PenFed will out with 4yr or 5yr 3% certificate in Jan 2016. In the past at times they have had some 1 month periods in which they offered great rates. If they do, then I'll pull-out from from Valor.

One thing I realize more than ever after all the hullabaloo here over Valor's annoying but relatively innocuous "poke in the eye" to some of its members, is what an insular and quaint little "Pleasantview" the DA clan truly occupies, and how quickly they would be emotionally crushed and destroyed by participation in the larger financial world where clashing forces and shifting fortunes are a daily given, and "exigencies" result in almost constant pressures and tweakings between parties to contracts and agreements. Valor makes one very secondary change to an already quite generous deposit account arrangement (a change allowed for under its terms and under the stress of a greatly deteriorating financial condition) and people are swooning under paroxysms of anguish and betrayal as if their assets had all just been confiscated. Make complaint and take action as you will, I agree. But keep a little proportion and restrain all the wild comparisons and extravagant accusations. They're truly unbecoming I must say.

What are you driving these days now that your Mercedes had to go back to the credit union you led into this mess?

By the way buddy, when you talk about tweakings between parties to contracts and agreements presumably both parties to the agreement are involved in the negotiation and smart business people negotiate penalties which kick in if some part of the contract is broken. You know, kinda like EWPs - not like "we're going to do this and you're just going to have to take it".

And if you think the DA clan in insular, then why are you wasting your time here?

i had the kasasa checking, the one they no longer offer that was giving a 2.5% rate if qualification met. although they no longer offer this version I was grandfathered in at the 2.5% rate. I was just told that the rate is being lowered to 1% if qualifications met.

this is what i received____________________________________________________________________________Valor Credit Union Administrative Offices315 Franklin Avenue I Scranton, PA 18503 I 1-844-VALORCUDateMember NameAddressCity, State, ZipDear Member,The following changes will be made to our Kasasa® Checking Accounts for the qualification cycle endingon January 30, 2016:? Kasasa Cash will reward an Annual Percentage Yield of 1.00% to those accounts that qualify in acycle.? The maximum refund amount that will be awarded to the Kasasa Cash Back accounts thatqualify in a cycle will be $5.00.? Nationwide ATM refunds up to $10 will be awarded to all Kasasa accounts that qualify in a cycle.Should you have any questions about these changes to your Kasasa accounts, please feel free to contactus at 1-844-825-6728 or visit a branch to speak with a Member Service Representative.We appreciate your continued membership.Regards,The Team at Valor CU

At least I got 1yr at 3% and can now withdraw penalty free, until they decide to reinstate. I'm probably going to take my money out of their, as their tactics are too shady. Since it looks like interest rates are finally rising i can move the funds to my norwest account that I haven't maxed out yet and within a year or by the time the norwest account matures. I think long term rates of at least 3% will be out there. So it may be a good thing now that we are finally moving to a rising interest rate environment. Just wished they did this a year from now instead of now.

An agreement is an agreement. You either uphold it, or you breach it. Valor did not 'breach' the contract as they always had an 'out' in the fine print of their disclosure statement which you had to sign in order to open the account. When you signed the certificate, in fine print under your signature it says "by signing this certificate, you are acknowledging and agreeing to the terms and conditions stated on the certificate and its accompanying disclosure statement. You can't **** about them changing the rules when they originally told you [in writing] that they could and you signed off on it!

You can however be disappointed that the 'all-you-can-eat' [or deposit] crab night is over. You can also be mad at yourself for not reading the fine print!, but you simply cannot 'blame' Valor for doing what it said it could do and you agreed to.

Now on a different subject....that being customer service and professionalism. I can honestly say that Valor CU provides the absolute WORST customer service and professionalism I have ever experienced. EVER! Even the actual CD itself is riddled with typos and non-nonsensical statements. In addition, many seasoned employees at various levels throughout the company are completely incompetent and have no idea what their products are. 'Misinformation' and focusing on what they 'can't' do for you seems to be their forté!

I called them up to close my cd today. I first asked and got assurances that there would be no penalty and i would be credited for the accrued interest. The rep i called had to put me on hold and ask and told me yes. They did do the closure in minutes and put the funds in my other account. However, they initially "forgot" to credit me the accrued interest in my account. I had to call back to get it corrected and credited. I'll be closing my other account once i remove all the funds.

This was their latest, and last for me, game they are playing with their members. What's next a 3% withdrawal fee at maturity if not placed in a regular cd. They can do it by as they say they can do change the terms at any time. The more likely scenario is that they will be going under soon and I'd rather have the funds out of there now than wait for a distribution from the NCUA

How in the world is Valor "stealing" from you? They're refusing acceptance of additional deposits to the CD, but still paying a rate higher than you could achieve anywhere else. It seems to me "the steal" is on your side rather than theirs.

its bait and switch. if they couldnt handle the response, they should have thought it out better. It's like your cell phone plan. Pay for a 2 yr plan at a reduced rate and if you break the plan you pay a termination fee. However, if they had the seedy language that valor is using, they can then change the rate after a few months and tell you that it is in the terms and conditions that they can change the terms at any time. That is what is unethical and shady

It's not "bait & switch" however, unless you believe Valor calculated on this course from the very beginning, - in which case allowing Certificate holders to now back out of the deal (penalty-free) would eliminate all the potentially certain advantages to them of such a strategy. Why bait & switch and then voluntarily let the victims reverse the scam's effects?

There's no "gotcha" at work here, - but rather just a messed up organization now trying to deal with the consequences of its bad decisions.

They've suspended the add-on feature of the Certificate, and investors who find that onerous or offensive can now remove their funds without expense and go elsewhere.

Thank you. VP of Valor. Many add-on cds have gone to term with reputable banks, America First credit union had a 3 yr add-on a few years ago that didnt change their rules despite interest rates went down

no. comparing doing it right and being incompetent. valor could have put the cap in initially , instead of shutting off the spigot completly. instead they first try a stunt by charging a processing fee to make a deposit, now this. just shows how poorly run they are.

I suspect the person posting comments 120, 122, etc. has some close connection to Valor and is attempting to minimize the cause and effect of the dishonorable and underhanded methods in which they have "baited" new investors with unrealistic expectations. I believe they have always had a back door exit plan or (2) from the onset of this offering, thus the "switch". Call it what you want, "Lipstick on a Pig". It's still a Pig!

Waiving penalty fees is simply Valors attempt to avoid the NCUA interceding on their actions for not providing the required 30 day notice of change of terms to the affected investors. More smoke and mirrors. Not an act of Valor, just protecting their ****.

This is life, unexpected things happen and we have to be adaptive to the changes. To each her/his own (action-wise). I have only $1K in it so will keep it there. I issued a protest to the both the CU and NCUA. That is that. Life goes on.

Do I change my mind on the said CU? It is not even an issue. Never fall in love or hate with any FI (i.e., no emotions involved). It was a business decision on their part after the replacement of their top management. I do not need to form an opinion on them.

I have many RCAs that earn higher than 3%, hope that they will last longer (not counting on it). Again, life is full of surprises. No need to dwell on it. Just move on.

The account agreement like most agreements with companies is written by their attorneys and are written to protect a company or institution. If you don't like the terms of the agreement you don't have to proceed with the transaction (Most people don't brother to read). The institutions will give themselves any outs the law provides. These agreements are not written to protect your interests. As to being ethical. ... Customers are looking for outs and/or technicalitys so they can sue or reneg on agreements such as loans. So it all comes down to the language of the agreement. Have you seen all the paperwork you must sign when you close on a mortgage?

Purchase money mortgage in those states that provide anti-deficiency legislation...all the time. Sooooooooo, we can walk w/o liability! Similarly the local laws for CUs preclude adhesion contracts, notwithstanding the printed document and one-side readings! BTW, when did a financial institution disclose that refinancing of a purchase money mortgage made the new loan recourse? Fraud is still fraud!

The irony will be if 3.5% 5 or 7 year CD's appear over the coming months, and those who cashed out their "Prime Rate" Certificates in anger and contempt will have to acknowledge Valor's action as the best thing that could have happened.

Ten year brokered (a good reference point) CD's are at 2.9%. Five year around 2.3%. We had 3.3% two years ago so it may be some time before those 3.5% rates return at your local institution.

The FED is raising rates, not because everything is hunky dory, but because they need to "reload" the rate gun in order to have something to do when the recession arrives from offshore. The alternative was/is NEGATIVE RATES, something European socialists are embracing. Once a cashless economy is established the little guy will be completely and forever enslaved to monetary and political forces beyond anything seen or imagined.

I sent in a complaint to the cfpb and I already received a response back saying they are forwarding the complaint to the ncua. Is this how it's supposed to work? Will each complainant get a response back from the ncua? I thought it's the cfpb who is supposed to protect the consumer and the ncua is only the insurer.

My previous complaint (about different credit union) to NCUA had 5 questions, they forwarded my letter to the credit union which answered (somewhat) 3 questions and the NCUA obviously did not read the answers. The NCUA considered the case closed. I had the impression the credit union comes first and the customer comes second. Similarly, my complaint to CFPB about Valor ( I did not want want to send my complaint to NCUA) was forwarded to NCUA and I don't want another whitewash.

Message from the CEO Dear Members, As you may have read in the letters that were mailed (and emailed) out from our Board Chairperson in September, I recently joined Valor as interim CEO. I would like to take a moment to introduce myself and let you know how excited I am to be on board with this organization. Though it may appear that there are troubled times ahead, I can assure you that we are addressing all issues and formulating a plan of action to correct matters. As we focus on the positives within the organization with the staff, I also wanted to bring your attention to the many good things Valor has planned to help the community from now until the end of the year. Throughout the month of October, I encourage you to contribute to one of the fundraisers we will be hosting in our branches or plan to attend the 4th Annual Chili Cook-Off for a Cure on October 23rd. All raise money for Susan G. Komen Northeastern Pennsylvania’s Race for the Cure. In November and December, Valor will collect donations for Toys for Tots and the Angel Tree benefiting both the Salvation Army and South Scranton Head Start. Additionally, our staff has a long-standing tradition of donating gifts to the veterans at the Gino Merli Veterans Center in Scranton and, from what I have been told we are planning to do the same this holiday season. Finally, as a thank you to our members for your continued trust in us, we will be offering free goodies in all of our branches on International Credit Union Day which is being held on October 15th this year. It is a small gesture for certain, however we believe that the members need to be at the heart of everything we do and we are committed to that philosophy going forward. Please rest assured that the Board of Directors, staff, and I will continue to work tirelessly to maintain Valor Credit Union as a growing and multi-service financial institution for years to come. With kindest regards, Ed Fox Ed Fox Interim CEO

I believe the "trust" in your credit union has long been lost by many of your depositors ever since you have taken away the add-on share certificate. Mr. Fox, if you ever want that trust back from your depositors, you need to bring back the add - on feature of the original share certificate immediately and for the maturity of the certificate!

Mr. Fox, while not downplaying the charitable activities can you or someone be focused on the concerns in this thread...and not dodge those concerns which raise serious ethical (if not others, to some of us) questions. Hopefully the "interim" can be soon removed.

We witness here from Fox one trait of a true leader, to wit, ability to compartmentalize. With Valor burning down all around him, Fox's focus was on a Chili Cook-Off!!

This dude has potential and is underutilized at Valor. He has not yet risen to his highest possible level of incompetence. Far larger financial organizations are desperately seeking executives with such a finely tuned tin ear as Ed so effectively has demonstrated.

Mr. Fox, as some of the other posters suggested, no one here really cares about your chili cook-off. If you're going to post on this thread, it would behoove you not to patronize us by attempting to deflect our attention from the proverbial elephant in the room.

What the members want to know is why you terminated the add-on feature. If it's because of the deteriorating financial condition of the credit union, tell us specifically how this action is going to ameliorate Valor's finances. My reading of your financial statement would indicate the real culprit for the losses you incurred in the last quarter is because of runaway overhead and non-interest expenses. I would like to know what exactly are you doing to reduce this massive increase of overhead, which is running at least $2 million in excess of the prior year. Are you cutting staff, closing branches or reducing other administrative expenses? I would like to see real progress in this area before taking the inflammatory step of curtailing the add-on feature.

Please understand that most of your members feel they entered into a sacrosanct agreement with the credit union and you are violating it in a manner that you would never tolerate from your members. So you're going to have to do a lot better communicating with us than this feeble attempt to distract us with irrelevant information regarding chili cook-offs.

Valor will be announcing a 3% processing fee to withdraw funds from any of their accounts on January 15th. On January 16th Valor will be announcing an interest rate reduction on all existing accounts to .0001%

Valor will be announcing a 3% processing fee to withdraw funds from any of their accounts on "January 15th. On January 16th Valor will be announcing an interest rate reduction on all existing accounts to .0001%"

Is this true? If so, does that mean NO withdrawal fee until !/15/2016?, Where is this info coming from? And if true, where is everyone going?

If the guy came out ad said "We closed the add on feature because Valor is having financial issues" the CU would probably have a run. CEO's are not going to downplay their organization. Maybe if a lot of people complain the NCUA will see how poorly the CU is run (ex high overhead.) and close it before it incurs further issues or merge it with another CU and the 3% CD's will disappear. They made a mistake offering basically an open end high rate CD without limits. So for those of you getting 3% on what you have maybe you should just be happy with what you are getting. The alternatives may be worse than your current situation.

It is true these accounts are today liquid. But Valor has not made any statement regarding how much longer they will continue this policy of liquidity. Of course you could challenge me saying any promise they might make in this regard is worthless anyway. I would have to bow to that argument.

I suppose they'll continue the policy of liquidity just as long as they believe getting the money out of Valor is better for them than keeping it in. Should the Fed continue with periodic rate hikes and deposit rates mirror that trajectory one might think their current logic would reverse itself at some point. Critical for Certificate holders should that happen is some advance notice by Valor that the window will be closing, - a courtesy they failed to extend when removing the add-on provision. One can understand, I suppose, from a purely exigent perspective. Just as Valor sought to preclude a huge inflow of funds by the immediacy of their first alteration, under different conditions they might similarly act to stymie a huge outflow.

Valor was generous but dumb to even offer the CD, now still dumb but better calculating in fiddling with the terms. Need I say we all preferred combination one?

Agreed. In my long experience with this sort of thing, I've not prior run into a situation where no notice whatsoever was given of such important changes in direction. I believe Ken also made mention of Valor's failure to offer advance notice to its members. Something of this nature is most unfortunate and reflects poorly on Valor decision makers.

Valors Prime Rate certificate is currently NOT a liquid 3% account as it is only 'liquid' in one direction! Had they not eliminated the add on feature, it still would NOT be a 'liquid' account since you would have had a steep EWP.

Valor could probably, [and mutually] get rid off ALL their Prime Rate Certificate holders by paying them the difference between what another institution is paying and Valors 3%.

Example: Say a Credit union is paying 2.6% for 6 years, and we are eligible to join, Valor would pay us the equivalent of 6 years x .04% of our deposited balance. [the difference in rate earnings over the term of the certificate]. We would then be free to close our Valor accounts [without penalty], and open new ones with a better institution. We would not lose any returns, and Valor would be relieved of their obligation since everyone went somewhere else. It would be so much cheaper for Valor to do this then to pay the full rate for the full term. And I quite frankly would rather deal with a different CU. Plus, the new CU would get a bunch of new money. It could be a Win-Win-Win for everyone involved. Seriously, think about it.

Not likely IMO or it/they would have been posted about. After all, Valor committed no breach of contract. An "out" is an out, and if few were aware of it they have only themselves to blame, however distressing the out-come. Still, I'd like to how many of the complainants have by now retired their Certificates and no longer do business with Valor. I'd guess very, very few (any?). 3% looks likely to be a great rate over the next half decade or so (no add-on notwithstanding) and outrage typically ends where one's own self-interest impinges. Who's been dumb enough to turn their back on it?

And btw, Valor is still in business and probably now getting their feet under them after capping the black hole they were at risk of being swept into. A bankrupt FI has no credibility to preserve so the upside of what they did was far greater than the temporary brouhaha now mostly past, - an upside both for themselves and their depositors, many of whom (as I suggested) continue to accrue 3% on their CD's.

"You" sound like an echo...I read an earlier post when there was a "whirlwind" to get this CD...which said, in effect, "why did the CFO leave?" There where similar posts and NONE of them excuse the conduct of the CU but do highlight the need for due diligence. The NCUA should be ashamed! Again, all should cc Liz Warren

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